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Looking back in anger? Retirement and unemployment scarring

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  • Hetschko, Clemens
  • Knabe, Andreas
  • Schöb, Ronnie

Abstract

Previous studies find that past unemployment reduces life satisfaction even after reemployment for non-monetary reasons (unemployment scarring). It is not clear, however, whether this scarring is only caused by employment-related factors, such as worsened working conditions, or increased future uncertainty as regards income and employment. Using German panel data, we identify non-employment-related scarring by examining the transition of unemployed people to retirement as a life event after which employment-related scarring does not matter anymore. We find evidence for non-employment-related non-monetary unemployment scarring for people who were unemployed for the first time in their life directly prior to retirement, but not for people with earlier unemployment experiences.

Suggested Citation

  • Hetschko, Clemens & Knabe, Andreas & Schöb, Ronnie, 2014. "Looking back in anger? Retirement and unemployment scarring," Discussion Papers 2014/11, Free University Berlin, School of Business & Economics.
  • Handle: RePEc:zbw:fubsbe:201411
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    Cited by:

    1. Hetschko, Clemens & Preuss, Malte, 2020. "Income in jeopardy: How losing employment affects the willingness to take risks," Journal of Economic Psychology, Elsevier, vol. 79(C).
    2. Alan Piper, 2014. "Zukunftsangst! Fear of (and Hope for) the Future and Its Impact on Life Satisfaction," SOEPpapers on Multidisciplinary Panel Data Research 706, DIW Berlin, The German Socio-Economic Panel (SOEP).

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    More about this item

    Keywords

    unemployment scarring; life satisfaction; retirement;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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